As discussed earlier today, on Wednesday the Fed will cut rates for the first time since March 2020, and the only question is whether Powell & Co. do a ho-hum 25, or go all the way with a 50 basis point cut. However, if the FOMC hasn't made up their mind already , tomorrow's final macro print ahead of the Wednesday announcement - the August Retail Sales report - won't give "team 25" much hope. That's because according to Bank of America's real-time debit and credit card spending data, the August retail sales print will be a big disappointment to consensus expectations.
As BofA economist Aditya Bhave writes, even though total card spending as measured by BofA's aggregate card spending, was up 0.9% in August, this was largely due to the early Labor Day holiday in 2024 (Sept 2) vs 2023 (Sept 4) which means more Labor Day related spending took place in August.
